Chinese President Xi Jinping’s advocacy for development in the private sector, a move that blurs the lines between private and state enterprises, may backfire and is potentially dangerous, warns Wang Xiangwei, former editor-in-chief of South China Morning Post, in his latest column.

Published on Think Hong Kong, Wang analyzed the CCP’s latest guidelines that order the private sector to help meet the country’s strategic goals.

While private companies contribute to 50% of the country’s tax revenue and 60% of its GDP, they faced barriers in entering the market and were seen by the authorities as potential threats. The latest policy marks a change in the attitude, as Xi has stressed efforts to unite people from the private sector around the party.

However, it also means that private enterprises would be forced to make compromises, as the CCP continues to expand its control and monitoring of private companies through the work of the United Front.

The policy states that the CCP should guide and educate private enterprises, which includes equipping them with Xi Jinping Thought and ensuring aligned political stances. By demanding companies to recruit party members and strengthen ideological education, the policy also strives to “create a core group of private sector leaders who can be relied upon during critical times.”

The CCP is soliciting loyalty from the next generation of entrepreneurs, making it clear that “as long as they want to make money, they need to obey the Party,” wrote Wang.

The harsh punishment of Ren Zhiqiang, an outspoken critic of Xi and a real estate tycoon who was sentenced to 18 years in jail, serves as a warning to other dissenting entrepreneurs. It is part of a wider campaign to strengthen the party’s control of the country’s growing private sector.

The party also relies on the private sector to stimulate consumption and create employment amid the historic economic slump induced by the coronavirus pandemic and growing tensions with the U.S.

Wang warned that Beijing’s determination to influence private firms may hinder entrepreneurial spirit and obstruct their overseas expansion. TikTok’s recent fiasco has shown that Western countries are wary of the cozy ties between the CCP and Chinese private firms, which would hamper their development outside of China.

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